A government decree published on Wednesday (30 June) will end the possibility of anonymous donations to civil society in Hungary from Thursday.
From now on, associations and foundations will have to indicate every year from whom they have received the money. The legislation stipulates that the NGO must indicate the „final donor” who donated money to the organisation, Telex reported via 444.hu.
Names must always be provided, even if the money comes from a company or other organisation. In such cases, it must be indicated who is behind the donor, for example, in the case of companies, the names of the persons who own at least 25 per cent of the company.
This is not the first time that the government has tightened up the reporting obligations of NGOs on donations.
Last year, the European Court of Justice struck down restrictions imposed on the financing of civil organisations by foreigners in Hungary that were “discriminatory and unjustified” and went against EU law.
That law required all civil society actors to register as ‘organisations in receipt of support from abroad’ if the amount of donations coming from outside the country reaches the threshold of about €22,000.
The case came to the EU’s top court after the European Commission initiated infringement proceedings against Hungary in 2017 for what it said were “discriminatory, unjustified and unnecessary restrictions on foreign donations.”
The fresh Civic Act replacing the struck down legislation is also a cause for concern, according to watchdogs. It requires organisations with a budget of at least HUF 20 million to be audited every two years by the State Audit Office, and the new government decree tightens this up.
Fewer donors expected
According to the organisation’s legal director of Transparency International Hungary, Miklós Ligeti, the government’s new decree is ostensibly driven by transparency, but whether this is what it is really about is questionable.
This could be a big blow from the government to those NGOs that do not have access to large amounts of domestic or government funding, as the NGO sector is increasingly dependent on individual and corporate donations, Ligeti told Telex.
“This will certainly have a chilling effect on donations,” he said.
Another problematic issue is that the reporting for this year, 2021, must already be done according to the regulation, while this year fundraising campaigns were conducted in a way that organisations were not aware that they would have to submit the names of donors later.
Having to report donors’ names retrospectively, before the regulation, could cause problems for organisations. (Vlagyiszlav Makszimov, EURACTIV.com with Telex)